The weight is getting stronger; PSEi closes above

On Friday, the peso rose again and the stock market rebounded from the previous day’s decline as investors digested a statement from the Bangko Sentral ng Pilipinas (BSP) holding back from raising interest rates further.

The currency gained 20 centavos to close at 55.67 pesos against the dollar. The Philippine Stock Exchange’s core index (PSEi) added 35.91 points, or 0.54%, to end the week at 6664.55.

The broader All Shares also rose 13.73 points, or 0.39%, to 3,548.47.

“The market continued to rally after breaking resistance at 6600 and ended the week on a high note, up more than 140 points from Monday’s close,” China Bank Capital Corp. said in a statement. This was stated by managing director Juan Paolo Colet.

“Value turnover on Friday also increased to more than 5 billion pesos, a sign that investors believe in the positive momentum generated by BSP’s decision to keep its key discount rate at 6.25 percent,” he added.

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“Overall market sentiment at the end of the week was also helped by hopes for a timely deal on the US debt ceiling.”

Claire Alviar, a researcher at Philstocks Financial Inc., said investors welcomed BSP’s policy decision and the cut in its 2023 inflation forecast from 6.0 percent to 5.5 percent.

“In addition to this, the net market value of turnover was 5.07 billion pesos,” she added. “Foreigners also helped lift the market, recording a net inflow of 298.74 million pesos.”

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said sentiment was bolstered by news that a bipartisan deal was being negotiated to avoid a US debt default.

He added that the dollar has corrected against the peso due to signals of a possible long pause in raising the local discount rate.

The currency and PSEi also strengthened after “some signals of the Fed’s (US Federal Reserve) reluctance to cut rates amid the need to continue to reduce inflation to the Fed’s 2 percent target.”

The peso opened at 55.75 pesos: $1 and fluctuated between 55.62 and 55.76 pesos. Volume fell to $979 million from $1.228 billion on Thursday.

On the stock market, the service sector and industry closed in the red, falling by 0.22% and 0.09%, respectively. Finance posted the largest gain of 1.34 percent.

A total of 21.32 billion shares worth 5.77 billion pesos changed hands.

The advancers equaled the laggards, 84 to 84, while 65 remained unchanged.